State Economic and Trade Commission, Regulating Petrol Station Franchise Several Opinions

Issued: August 26 2002
Applicability: "Petrol station franchise" refers to the retail of oil products and the provision of related services by a petrol station in a uniform system of operation under a franchise contract between the franchiser and the franchisee whereby the franchisee is authorized to use the trade name, registered trademark, proprietary technology, operation mode, operation technique and service standards, etc. of the franchiser (Section One).
For the purposes of these Opinions, the petrol station franchisers shall be PetroChina Company Limited (PetroChina), China Petroleum and Chemicals Corporation (Sinopec) and their authorized subsidiaries (a list of which is attached) (Section Three).

Main contents: Petrol station franchisees shall comply with local petrol station development plans and franchisees shall meet State standards in respect of environmental protection, fire prevention and construction safety and have good regulatory compliance records in the last two years (Section Four). The franchiser shall provide operation manuals, technical guidance, training and other services to the franchisees (Section Six). The franchisee shall not sell third party oil products, conduct its own promotion, assign the franchise to other parties or disclose the trade secrets of the franchiser (Section Eight). The franchiser may charge an initial franchise fee, royalties and other agreed fees (Section 13). Before the start of franchise operations, the relevant documents shall be filed with the relevant provincial economic and trade authority. These documents include the basic information of the franchiser as specified in Section 10, the franchise contract and the franchise business authorization document (Section 14).
Related legislation: State Council General Office, Launching a Special Rectification and Disciplinary Campaign on Petrol Stations Circular, 2002